Austrian MPs reject EU-Mercosur trade deal over Amazon fires

Austrian legislators have rejected the proposal for a free trade pact between the EU and the Mercosur bloc of four Latin American countries amid widespread concerns over fires blazing through the Amazon basin.

Nearly all parties in the Austrian parliament’s European Union subcommittee voted against the draft for a EU-Mercosur free trade agreement late on Wednesday, marking the latest blow to the apparently increasingly imperiled deal.

That means the government must vote against the deal at the EU level, where rules stipulate that all 28 member states and their parliaments must agree to trade deals.

Brazil and Argentina, along with Uruguay and Paraguay, are the four countries in the Mercosur trade bloc, which earlier this year agreed to one of the world’s biggest trade deals with the EU after 20 years of negotiations.

The EU is already Mercosur’s biggest trade and investment partner and its second-largest partner for trade in goods.

In terms of tariff reduction, the deal could be the EU’s most lucrative trade deal to date, with the savings potentially four times greater than for deals with Canada and Japan combined.

But it has looked increasingly fragile in recent weeks as Brazil has come under intense pressure from European countries over its environmental policies and an epidemic of forest fires in the Amazon basin.

The pact requires the Latin American giant to abide by the 2015 Paris climate accord, which President Jair Bolsonaro has threatened to leave. It also aims to end illegal deforestation, including in the Brazilian section of the Amazon rainforest. Critics of Bolsonaro say he has created a climate of impunity for those felling the forest illegally, and has thus emboldened them.

“The rainforest is burned down in South America to create grazing land to then export discount beef to Europe,” Elisabeth Koestinger, a former agriculture minister of the conservative People’s Party, said in a statement after Wednesday’s vote in Austria. “The EU mustn’t reward that with a trade agreement.”

France and Ireland have already warned they will block the deal unless Bolsonaro does more to combat the wildfires raging through the rainforest, the largest tropical ecosystem of its kind in the world and a vital bulwark against global climate change.

The Amazon rainforest covers more than five million square kilometres across nine countries: Brazil, Bolivia, Colombia, Ecuador, French Guiana, Guyana, Peru, Suriname and Venezuela. Some 60 percent of the rainforest sits in Brazil.

The ecosystem acts as an enormous carbon sink, storing up to an estimated 100 years’ worth of carbon emissions produced by humans.

European Council President Donald Tusk said last month it was difficult to see the accord being signed off on by EU member states while fires in the rainforest continued.

“The EU stands by the EU-Mercosur agreement,” Tusk said. “But a harmonious ratification is hard to imagine as long as the Brazilian government allows for the destruction of the green lungs of planet Earth.”